The Reserve Bank of Zimbabwe Governor (RBZ) John Mangudya and the Minister of Finance and Economic Development Mthuli Ncube are at each other’s throat again, this time over the Zimbabwe dollar exchange rate peg.
Mangudya unilaterally fixed the exchange rate at 25 to the U.S. dollar as the country entered a coronavirus lockdown in March, ignoring the recommendations of the Monetary Policy Committee and Ncube, a Bloomberg report claims.
Zimbabwe had been using a managed floating exchange rate system before Mangudya’s unilateral decision.
Reports suggest that this is not the first time that Mangudya and Ncube have clashed over policy issues.
Currently black market rates for the Zimbabwe dollar range between 75 and 90 per unit of the U.S. currency, a development which mirrors the grim 2008 era.
The imploding economy prompted the politburo of the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) to summon Mangudya and Ncube last week to explain why the economy was deteriorating, the Zimbabwe Independent newspaper said.
Bloomberg could not get responses from both Mangudya and Ncube while calls to the deputy finance minister and finance secretary weren’t answered as well.
Zimbabwe reintroduced its own currency in 2019 after abandoning the multi-currency system that was dominated by the US dollar.